When Narendra Modi says, “there are ways to close doors to new ideas...we want to open them,” entrepreneurs have a reason to smile. 2016 happens to be the golden year for the start-up ecosystem of India with the government focussing on the less than five year old entities registering an annual turnover of up to INR 25 crores. What is more important is the recognition of the role of the start-ups in using technology or intellectual property to drive innovation in products, services and processes. Here are the seven takeaways for budding entrepreneurs from the Indian Government.
INR 10,000 crore mega fund
The Government plans to cut the dependence of entrepreneurs on foreign angel investors by setting up the INR 10,000 crore fund to be routed through the SEBI registered venture funds. So, the likes of Axis Venture Capital Trust and HDFC Property Fund would have bounty of resources to provide seed capital to the emerging start-ups.
INR 2,500 crore credit guarantee fund
Siphoning off INR 500 crore annually for five years, the credit guarantee fund of INR 2500 crore would ensure the flow of venture debt from the banks. It would make your loan applications hassle-free for setting up a company seemingly sceptic to the banking buddy at the other end.
Income tax exemption for the first three years
If you plan to start-up your dream business anywhere between April 2016 and March 2019, you would enjoy an income-tax holiday for the first three years. Moreover, a company investing its profit in the INR 10,000 crore mega fund would be exempted from the tax on capital gains. It would ensure the liquidity of the funds for the start-ups.
Simpler registration with mobile app
Ministry of Corporate Affairs is all geared up to ensure your company’s registration with the click of a mobile within 24 hours. The Government is ready to launch a mobile app that would simplify the registration form. It would also act as a platform for communicating with the government offices. Additionally, it would guarantee the easy flow of information.
End of Licence Raj
For the first three years, you could self-certify your start-up using the anticipated mobile app. It would have a checklist of the labour and environmental laws. It essentially translates into ‘babu’ free premises and lower compliance costs. Radhika Agarwal, Co-founder & CBO, Shopclues, puts it aptly, “The policies around cleaning the license raj will be a huge booster for startup community.”
Thrust on Intellectual Property
The faster processing of patent approvals is on the government radar with a target of zero trademark pendency within a year, the role models being the US and Japan. The Industrial Policy and Promotion Department swung into action with the appointment of 1000 patent examiners. Moreover, it joined hands with the IITs for outsourcing the work load.
Standup India scheme for women
Each branch of the public and private banks would adopt a woman entrepreneur. It would warrant their financial inclusion and uphold their access to funds for setting up the business.